Games of skill typically rely upon the knowledge and/or ability of the participants in determining the outcome. However, almost all games of skill possess some level of randomness or chance.
Games of skill are technically not considered gambling, whereas, gambling typically relies almost entirely upon a random even or set of events that are difficult, if not impossible, for anyone, including the game operator, to predict or manipulate to gain an advantage. This level of randomness is achieved, for example, by a well-shuffled deck of cards, a well-balanced set of die, a coin toss, a sequence of balls from a bingo machine, etc.
In contrast, a game of skill depends, at least somewhat, upon each participants skills, but being a game, there is still some level of randomness, otherwise, the most skillful participant will always win. One of the challenges that operators of games of skill face is to establish rules and scoring criteria that are fair with completely objective standards that are outside the control of the participants and the game operator.
The Internet presents great opportunities along with real skepticism for operators of games of skill. When such a game is Internet-based, the player must assume that the game is being operated fairly and that the game operator or other participants are not cheating, etc. What if the on-line game operator or other participants have the ability to manipulate the game's parameters while the game is progress causing a participant to lose? How would the player know if this is happening if the parameters are hidden or subjective?
Millions of players take part in State run lotteries each week, spending billions of dollars to buy lottery tickets in hopes of picking the winning numbers. Again, the players count on the fact that the number selection process is truly random and that the lottery is not rigged. In such, often state regulators audit the lottery and the drawings are witnessed by, for example, an auditor or, at times, televised on television for all to watch. Great pain is taken to assure the integrity of the process used to select the winning numbers and to make sure it is truly random and cannot be manipulated by the lottery operator or its participants or permit certain players from picking numbers that are more likely to be selected. In fact, the viability of any lottery is dependent upon its fairness.
Recently, some organizations offer some sort of game or contest to entice potential clients to a web site, perhaps to present those potential clients with advertisements or enroll them into an organization, etc. Notably, recently during a college basketball season tournament, a national lending company ran a contest for predicting the winners of each game of a large tournament (bracket) where the predictions were made before the tournament began. The contest was scored based on accuracy with participants being ranked based on the number of winners they selected. More points were awarded for the predictions of the winners of later-stage rounds in the tournament. Those who had the highest score and were the most accurate at the end of the tournament won substantial cash prizes. The contest also offered a contingent prize of a billion dollars to anyone who could pick all of the winners for each game of the entire tournament, which would result in a perfect score. Although the contest was a game of skill, requiring some knowledge of the teams that were competing, the odds of selecting the winners of every single game in the tournament and achieving a perfect score was remote. As such, nobody was able to win the contingent prize.
The example above relied on purely objective criteria for scoring with the parameters of the game being virtually impossible to manipulate (i.e. fixing multiple basketball game). Unfortunately, many games of skill lack objective criteria for scoring and can be manipulated. For example, some operators are now running competitions based on video games where the participants are ranked based on their ability to score higher in a completely virtual setting. Of course, the operator has the ability to change the programming of the video game and affect the outcomes. Furthermore, there is no way to determine whether or not an operator has done so. Additionally, there have been numerous examples of participants hacking into the computer system of the game operator to achieve an unfair advantage. When such an event occurs and is exposed, the viability of the game is usually compromised resulting in cessation of the game.
In the above mentioned games of skill, much effort is required for each participant to exercise that participant's skills. In other words, to impact skill onto selecting the winner of 32 sporting games, the player must know something about how the teams are aligned and, possibly, something about the skills of each individual team. To compete in a video game within a virtual setting, each participant must learn how to move and manipulate objects within that particular game and devote significant time to progress through the video game. In many situations, potential players do not want to invest huge amounts of time and effort.
What is needed is a skill-based gaming system that will provide a completely objective environment without the need for outside auditing, such that the scoring system and results can be readily verified and ascertained by the participants and the operator.